Sometimes it might seem like the mobile payments market is a bit stagnant. Sure, we hear about new developments all the time, and new use cases keep cropping up, but it doesn’t often seem like we see a lot of people pulling out their smartphones at restaurants or retailers. A new report from IT Intelligence Markets, however, notes that this market is not only growing, but is poised for substantial growth through 2026.
The IT Intelligence Markets report notes that the mobile payments market is set for a compound annual growth rate (CAGR) of over 33 percent in the period between 2019 and 2026. That’s going to mean a total of $457.4 billion in 2026, which is actually approaching two and a half percent of US gross domestic product (GDP) for 2018.
The biggest impetus of this growth is the likewise-growing numbers of use cases for mobile payments. Thanks to these apps, which increasingly offer a range of goods and services available right at the touch of a screen, shoppers have a whole new access to easy, convenient shopping experiences.
The report goes on from there to identify other points driving the market, as well as a range of challenges that are rising to face the wider industry. It also breaks down some of the key market segments, like the growth of near-field communications (NFC) based mobile payments, sound-based mobile payments like we recently saw here with Sonorax, and before that with ToneTag, and several other technologies.
It’s clear that we’re already seeing steadily growing new numbers of uses, and cultural uses are a part of that. China, for example, has taken to mobile payments because as far as the culture is concerned it’s like money but in digital form. The credit card never really caught on there, thanks to, among other things, a cultural taboo about debt, so they went mostly from cash to mobile. This gives the report a lot of extra credence, as we’re taking into account those various cultural factors as a part of big growth.
Only time will tell how accurate this report is, but we’ll likely see so many new developments in there that the report will be either right well in advance or otherwise nowhere near.
Ellie Dautner, a finance postgraduate from the University of San Diego, is an expert journalist in fintech and mobile payment technology. She specializes in writing about fintech, mobile payments, startup funding, and acquisitions.